194.

AGRICULTURAL. RELIEF
Mr. Aswern. May I ask another question about cotton? I am
interested in this cotton bagging question. We have a bill here
before the committee on that. If there was a surplus of 2,000,000
bales of cotton under the Haugen bill, with your fee in it, could the
board take that 2,000,000 bales, select the lower grade and sell it at
a price so low that it would be a substitute for jute bagging, and then
pay the loss out of the equalization fee? Would that be practicable?
That would work out, would it?

Mr. Caverno. They would do just exactly the same as with
wheat. Taking that 1925 crop, there are 2,000,000 bales of cotton on
top of 14,000,000 bales, making 16,000,000 bales and selling for
$300,000,000 less than the 14,000,000 bales would have sold for.
If that 2,000,000 bales of cotton had been burned or dumped into
the Atlantic Ocean the balance of the crop would have brought
$300,000,000 more.

Mr. AsweLL. You may have to sell your 2,000,000 bales so low——

Mr. CaverNo. If you gave it away it would raise the price of the
crop $300,000,000.

Mr. AsweLL. Those people who owned it, how would they get
anything out of it, the 2,000,000 bales?

Mr. CavERNO. It is purely a question——

Mr. AsweLn. Then, according to your statement, 1 understand
your board would find it good business to take 2,000,000 bales and
give it away?

Mr. CavirNo. It would have brought $300,000,000 more that way.

Mr. AswerLL. I am thinking about the little fellow who owns some
of the 2,000,000 bales.

Mr. Caverno. The whole crop would come onto the market at a
higher level. :

Mr. KincHeLOE. Then, if this bill becomes a law you will not need
those other bills.

Mr. AsweLL. I am thinking about this little fellow.

Mr. CaveErNo. He has got the market price for his cotton in his
pocket. If that 2,000,000 bales were actually destroyed it would
raise the price of the balance of the crop $300,000,000. Therefore,
every penny you get for that 2,000,000 bales cuts down on the amount
of the equalization fee. The equalization fee would have to finance
the whole of it if we gave it away.

Mr. AsweLL. Who would be owning that 2,000,000 bales at the

time it was given away or used for bagging?

Mr. Caverno. It would be owned by the equalization fee, and
whatever they got from the jute manufacturer would be put in the
equalization fund and cut down on the equalization fee, and every
man would receive the market price for his cotton. I should say it
would be the duty of the board to operate with every crop as long
as agriculture is below par in a way which would bring the maximum
price for the crop and most equally distributed to all those who raise
it. That is one of the operations they could perform which would
bring about that result.

It is an indictment of our marketing system that we have no way
In meet a situation like that in which 16,000,000 bales of cotton sold
for $300,000,000 less than 14,000,000 would have sold for. There
is lost $300,000,000 to the South and 2,000,000 bales of cotton, and
one-half of that loss went out of the United State of America.